Links 1/7/16

How I Saved My Cat’s Life with a Sledgehammer and a Selfie Stick Medium. This is a nice story even if you don’t like cats.

‘Career change’ a myth to keep workers docile Daily Mash

Antarctic Life: No Dogs, Few Vegetables and ‘a Little Intense’ in the Winter New York Times

This physicist has a groundbreaking idea about why life exists Business Insider

Alexander and Baldwin ending Maui sugar production this year Maui Times (Kokuanani). Wow, I’ve driven by that factory a ton of times. It looks just the same as it did the last time I was in Maui, in the early 1990s. I was in Maui when Dole announced it would no longer buy bananas and pineapples from Hawaii and was shifting production to Central America. The locals were stunned. Kokuanani points out:

Sugar cane uses TONS of water. I can’t remember the exact numbers [# of gallons to produce one pound of sugar] but it’s a LOT. Has been a big issue during the recent drought, with repeated calls to get rid of sugar cane as a crop. [It’s the growing, not the production that takes the water.] However, there are fears that Maui will turn into a dust bowl without the cane vegetation to anchor the dirt and the irrigation to keep the soil wet. You see this during the times between plantings — after one crop has been “completed,” burned and removed, before the next crop is planted.

White House Disputes North Korea’s Claim of Hydrogen Bomb Test New York Times

Powers pledge united N Korea response BBC

World Bank issues ‘perfect storm’ warning for 2016 Guardian

North Korea’s Nuclear Mistake Bloomberg. The tone of this piece strikes me as odd.

Mr. Market Has a Nervous Breakdown

China Stock Markets Closed for Second Time This Week Wall Street Journal

Soros Sees Crisis in Global Markets That Echoes 2008 Bloomberg

Global Stocks Pummeled on China Volatility Wall Street Journal. AM update

Why is the renminbi rattling markets? Financial Times

Another 2% Yuan Devaluation Coming Up? What Are the Risks? Explaining Chinese Capital Flight Michael Shedlock

Europe shares drop 3% on China move BBC

Brent crude oil breaks through $33 a barrel Financial Times

$30 Oil Just Got Closer as WTI Slides to 12-Year Low on China Bloomberg. The video points out clearly that US consumers have used their oil “savings” to pay down debt.

Wall Street set for tumble on China turmoil, oil CNBC

The Europe Question in 2016 Nouriel Roubini, Project Syndicte

Google is Microsoft Politico

David Cameron’s unhealthy NHS fight Politco

Greece’s Glimmer of New Year Hope Wall Street Journal

Refugee Crisis

Opinion: Red alert in Cologne DW

Germany: Turkish effort to stem refugee flow falls short Politico


Saudi-Iranian spat: Another skirmish in the oil war Pepe Escobar (resilc)

Turkey’s War Against the Kurds Counterpunch

Was This Fantasy Syria Timeline Leaked To Push For Open War? Moon of Alabama


Bernie Sanders, Donald Trump Embody Starkly Different Populist Impulses Charles Pierce, Esquire (resilc)

Donald Trump, With Overbooked Crowd, to Tread on Bernie Sanders’s Turf New York Times. The headline and subhead, which is as far as many readers get, looks to be Sanders-bashing. First, so what if Trump campaigns in Vermont? Did the Times forget that the Democrats and Republicans have separate primaries? Second, Trump claimed “confirmed” attendance for an upcoming rally in Alabama that was hugely over the actual turnout. Third, Vermont is not all that far from New York. It’s not impossible that some of the participants will not be locals.

Tell DNC Chair Wasserman Schultz: Resign immediately. CREDO. Please sign. About time she was targeted.

Republican Cuts Poison Agenda Project. A good guerilla video.

TransCanada launches $15-billion free trade challenge over Keystone XL denial Calgary Herald (JSC)

Illinois college moves to fire professor who said Muslims, Christians worship same God Reuters. EM: “The Reuters piece weasels out by failing to note that the Prof’s statement was, in fact, correct, insofar as any such statements about mystical beings can be deemed correct.”

Angry White Men

Oregon occupiers want to work with residents; locals critical Reuters. Reslic: “‘Will work for food’.”

Alabama’s top judge urges gay marriage halt BBC. I’d expect the Administration to escalate this fight. The Democratic party incentives go that way.


PTSD nation? U.S. shootings inflict growing mental toll Agence France-Presse (furzy)

Black Injustice Tipping Point

Texas Grand Jury Indicts Trooper in Sandra Bland Case on Perjury Charge Wall Street Journal. A misdemeanor charge. Lordie.

Police State Watch

The Spectacle of the Scaffold – Foucault, Corporal Punishment, and the Digital Age Jed Hovey, Blue Labryrinths

I.M.F. Breakthrough Is Seen to Bolster U.S. on World Stage New York Times. Way way too congratulatory….


Federal Reserve minutes reveal concern about low inflation led to a ‘close call’ hiking rates Washington Post

Federal Reserve too ‘concerned’ by weak inflation to push on with rate rises Telegraph

Meet the FOMC Financial Times

FT Explainer: Pricing mismatch worries hit ETFs Financial Times

Is the whole theory of secular stagnation a hoax? Ambrose Evans-Pritchard, Telegraph. Important. I need to read the underlying Claudio Borio paper, which is here.

Private Equity

Private Capital Fund-Raising Goal Rises to a Record $946 Billion New York Times. Seeking even more money when valuations are at historically high levels.

NLRB General Counsel issues complaint at TPG Capital, Leonard Green & Partners-owned casino Private Equity Closer Look

Defaults and Restructuring Next for Retailers Wolf Richter. This goes under private equity because, natch, many of the ones in really bad shape have lots of debt as a result of being bought by a PE fund. Worse, as Eileen Appelbaum and Rosemary Batt discussed at length in their landmark book, Private Equity at Work,

Class Warfare

What top researchers discovered when they re-ran the numbers on income inequality Washington Post. Important. Real wages for the bottom 90% may not have been stagnant since 1970…just close to stagnant.

Is a $15 an Hour Minimum Wage Adequate? Counterpunch

Yellow Cab to file for bankruptcy SFExaminer (Alan C)

Note To Joe Stiglitz: Banks Originate, Not Intermediate, And That’s Why Aggregate Demand Is Stuffed Steve Keen, Forbes (furzy). Today’s must read.

Antidote du jour (Jason C). From the first Comedy Wildlife Photography Awards. This one by Alison Buttigie was “highly commended”:

Highly-Commended-Alison-Buttigieg links

See yesterday’s Links and Antidote du Jour here.

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  1. Kevin Smith

    reL Illinois college moves to fire professor ,,,
    “The Reuters piece weasels out by failing to note that the Prof’s statement was, in fact, correct, insofar as any such statements about mystical beings can be deemed correct.”
    Ha! Ha!
    Excellent analysis Yves.

    1. RabidGandhi

      It’s stickier than it seems because, as I understand it, professors (and students) at Wheaton U are required to sign on to the university’s doctrinal statement before entering the school. So while I think Dr Hawkins’ stance was 100% laudable, in pure contractual terms, she seems to have signed away the ability to make Yves’ argument.

      Rather remiss of the Reuters article not to mention this.

      1. Synoia

        Where in the Christian panoply of dogma do they disagree that the Jewish, Christian and Muslim God are not the same being? Is this in Wheaton U’s doctrinal statement (aka: Dogma)?

        This appears a case of the truth hurting.

        1. RabidGandhi

          Listen, between me, you and the internet, this is a witchunt. And despite Wheaton’s protestations to the contrary, Dr Hawkins is being persecuted for wearing a Hijab, not for her statements.

          That said, a glance at the Wheaton Statement of Faith shows that their understanding of who God is is starkly different from what Islam holds.

          As I see it, the problem is that an employer can make employment contingent on signing a statement of faith which then puts the employee on very mushy legal ground.

          1. alex morfesis

            Jews 4 jesus & mo 2…the folks at wheaton need to get out more often…there is nothing in the statement of faith that would contradict an honest assessment of the holy koran itself, save the “only begotten” part…it does not even say hay-sues died on the cross…which is probably ThE biggest issue

            Orthodox women until 50 years ago were looked down upon if they did not come to church services covering hair in some version of what is called a hijab…

            Would not the son of marium bitch slap all parties for wasting time and energy on who had the proper patent and copyright about what color suit issa/jesus will wear on judgment day…

            Mind you…i consider myself pythagorian…

            But history is knee deep in blood spilled in the name of two groups insisting which version of what is…is

          2. optimader

            then puts the employee on very mushy legal ground

            People.. this is Wheaton College the institution that gave us Billy Graham! Not sure what she was thinking.

          3. Plenue

            Their doctrinal views may be vastly different, but that it is the same deity is simply a mundane fact. It’s the God of Abraham. One of the central ideas of Islam is that it’s a return to the ‘true’ religion of Abraham, Judaism and Christianity being corrupt deviations from the original. It even goes out of its way to say that the other ‘People of the Book’ (Jews, Christians, and Mandaeans), if they’re sincere in their worship, will achieve paradise. Their doctrine is wrong, but they are praising the same God so they get a pass.

            Wheaton College is crappy at theology, big surprise.

            1. Optimader

              Their doctrine is wrong, but they are praising the same God so they get a pass

              I dont think it is that they get a passso much asthet will be tolerated in the most beneign case of islam, tolerated if they dont proselytize in islamic turf.

              The notion that they all have the “same god” is more a theoretical curiosity, akin to dancing angels and pinheads, than an operationally cohesive reality.

              1. RabidGandhi

                …which is exactly my point. Having the theology be mushy and subjective works out just dandy when you want to fire a tenured professor for other motives.

  2. MikeNY

    Re AEP:

    So the BIS finally recognizes the Fed’s “assymetric bias” (aka: serial bubble blowing), that the Fed’s bubble-agnosticism is a crock of sh*t, and that the “output gap” is a chimera, the deluded extrapolation of a bubble-headed Fed.

    2001 is calling and wants its intuitions back.

    I guess it’s progress. After the next catastrophic meltdown, maybe someone at the Fed will bother to read the paper and actually question their oligarch ass-kissing assumptions.

    1. jsn

      I didn’t read the paper, but if AEP is right that “If the BIS hypothesis is correct, there is no lack of global demand,” then this is just more Friedmanite clap trap that assumes demand without any theory of where it comes from where, like a habitable environment, it is just an assumption. If Borio is coupling this with a strong position on labor rights, guaranteed jobs or guaranteed income, or a call for massive green investment then this is progress. Otherwise its the fist mate sniping at the captain on the Titanic.

      1. RabidGandhi

        The beginning of the AEP article seems to say the opposite of the end. He starts off with

        It has implicity indicted the US Federal Reserve and fellow central banks for perverting the machinery of interest policy to conjure demand that may not, in fact, be needed

        and ends with

        Money and debt contracts are social conventions. They can be torn up, or reinvented. When we go into the next global downturn – perhaps in 2017 – we may have to resort to an entirely different form of QE. The next step is to print money to fund state spending directly, and probably behind capital constraints in a less “globalized” world.

        Either AEP is seriously confused or I am (both very likely scenarios). He starts off as a monetarist and concludes by positing a fiscal solution. Is state spending needed to restore demand or not?

          1. RabidGandhi

            It’s not entirely clear he isn’t. His conclusion that:

            Money and debt contracts are social conventions. They can be torn up, or reinvented… we may have to resort to an entirely different form of QE.

            bears an uncanny resemblance to Steve Keen’s conclusion (in the Forbes article cited above):

            the only real solution to the Great Malaise: a Modern Debt Jubilee as I call it, or People’s Quantitative Easing

            1. MyLessThanPrimeBeef

              I think Keen’s People’s QE should be given to the people for them to spend on whatever they want, not just for debt jubilee.

              1. RicRadio

                AEP often likes to have it both ways. It leaves his position open to speculation and debate as his preference, rather than being hoisted by critics on a firm position, which can be awkward.

        1. Darthbobber

          The confusion comes from missing the point where he goes from summarizing the BIS/Borio arguments to criticizing them from his own perspective. (Its an unusual style by American polemical standards in that he actually spends more of the article summarizing the position he’s going to attack than he does on the attack itself.)

    2. IDG

      The BIS paper is probably supply side garbage.

      There is global built-in overcapacity in almost any sector of the economy.

      They get the causality backwards, in more than one sense:
      1) Interest rate manipulation by CB’s cannot control the credit cycle. In fact, more often than not it unleashes a positive feedback loop due to interest income channel.

      If the pvte sector has open capacity to leverage raising interest rates will increase income and ‘investment’. This faith over CB’s has to be blow out already, is pure monetarist garbage holding policy back, and what is worse, is always ex-post, reactive.

      2) The reason why bubbles develop are because lack of asset side discipline (aka law of laws or enforcement). They have been trying thought liability side discipline for fucking centuries, how about time t acknowledge it doesn’t work and that we actually need operative functional non-corrupt governments which enforce laws. Furthermore this has been proven to work in many sector in many countries, hen the “freemarket uber alles” bullshit has been ignored. No amount of “libertarianism” mythology can deny this.

      Furthermore, the only reason we need bubbles at all, just as we need to keep coming with bullshit jobs, negative added value jobs and various schemes for wealth and rent extraction is because capitalism itself is inherently unstable due to the decaying rates of profits, wealth accumulation and lack of recycling mechanisms for wealth and productive growth redistribution. Until we address those real problems through democracy taking control over capitalism again and marginalizing unaccountable institutions like the BIS, the IMF or the different churchs of central bankers and monetarists, no amount of foolish neoliberal or supply-side credo by BIS and similar institutions are going to solve our current economic problems.

        1. MyLessThanPrimeBeef

          I think there is under-capacity in the bare-foot doctor sector of the economy.

          We need more cheap, affordable doctors.

          1. IDG

            But is not really doctor scarcity. It’s the dynamics of the healthcare system and corrupt regulations that increase prices.

            I’m not sure how it’s in the USA but in my country before austerity hysteria hit there was never a shortage of doctors and the system was adequate, even if not perfect.

            Also the dynamics of the system discourage prevention, behavioural changes (re diet and exercising, work habits, stress) etc which would further reduce the demand for doctors. Instead of chronic problems are encouraged by our current economic and social systems.

            Don’t expect this sort of analysis to come from the BiS.

        2. JTMcPhee

          …”we” already got us some redistribution:

          “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

      1. Yves Smith Post author

        Borio argues with the mainstream all the time, but often in a highly defensive manner, given his position at the BIS. That often makes his papers hard to parse. And as a reader pointed out above, what AEP said about the article was contradictory.

        So you are off base in your assumptions re Borio. It’s more likely that AEP, who is a die-hard monetarist, has misconstrued or taken out of context what Borio was saying.

        1. Oregoncharles

          (Random choice of where to put this – there are many examples)
          When the thread gets long, it can be very hard to tell what post is being answered. I recommend liberal use of @so-and-so to clarify. To understand this one, for example, I practically had to use a ruler to figure out the indent.

          And responding to the content: AEP’s piece struck me as verging on incomprehensible; maybe that’s the contradictions at work. Given that he’s a popularizer, that’s strange.

      2. Darthbobber

        You lose me at the point of “taking control over capitalism again”, as if there was some point at which “we” had meaningful control over it. I think that at the decisive point, one wither expropriates capital or one yields to its priorities, leaving only a menu of what specific form the yielding will take.

        1. IDG

          Well, you are right, but during brief times the power levers were way more balanced than now are. Though never the control over it was complete.

          Maybe I should say return to a period where the tension between capital and labour was higher, labour bargaining power higher and hence outcome for the majority more beneficial.

          I believe in the end is the belief system that perpetuates the ‘artificial scarcity’ mindset that allows for a higher control of capital, if we can overcome this depends a lot on both how our real resource problems are (climate change, resource constraints, ecological problems), and how tensions within the system force us to rethink the system (ie. increasing productivity, diminishing carbon dependency, automation).

          In the end the system may not be salvageable but is hard to know how the future will turn out.

      3. Darthbobber

        I’ve just finished by first read-through of Borio, et al. Not supply-side garbage in the Laffer curve worshipping sense, and some of the conclusions are quite sane. For instance, this
        “Nor is it surprising if monetary policy may not be particularly effective in addressing financial
        busts. This is not just because its force is dampened by debt overhangs and a broken
        banking system – the usual “pushing-on-a-string” argument. It may also be because
        loose monetary policy is a blunt tool to correct the resource misallocations that
        developed during the previous expansion, as it was a factor contributing to them in
        the first place.”

        BUT-(and this is an off-the-cuff first reaction to one of the key arguments). Like most schools that focus almost exclusively on monetary effects, some linkages that are absolutely critical get excluded from the analysis. The paper focuses heavily on the tendency during asset bubbles for investment to move from higher-to-lower productivity growth sectors. Which does happen. But a large chunk of this effect is the drop off in the allocation to manufacturing and the rise in, among other things, construction. (In passing, note that these are also polar opposites in the tradeable-non-tradeable dichotomy.)

        Now- the data sample is drawn drawn from several “advanced” countries in the 1979-2009 period. Which also happen to be pretty much the same nations that have been bleeding manufacturing for decades due to labor and regulatory arbitrage. (The starting point puts us only a few years from the Reagan/Thatcher induced shift in that direction.)Note that other than Korea, the main nations to which this capacity has been moved put in no appearance.

        So there’s already a heavy bias in the direction of seeing a “reallocation of investment” away from the “high productivity growth” sectors in these economies. And its been going on for quite some time. Because “higher productivity growth” doesn’t equate to “most profitable domestically”. (eg, productivity gains in the US-based printing industry have been astronomical these past 20 years or so, but you’d have to be an idiot to dump a big chunk of capital into it.)

        OF COURSE “free money” whether from an asset bubble or QE is going to make these allocation numbers look even worse. Because the free money doesn’t address the question of why somebody holding that money would do their “high-productivity-growth” allocations IN THOSE COUNTRIES. So that portion of the free money being spent domestically is spent on the DOMESTICALLY most profitable investments. (at least the part that’s “invested” at all.)

        To close a long-winded tirade, Borio et al seem correct in addressing a shortcoming of QE/ZIRP as a strategy, but they don’t really seem to have one that would work any better. And since it would be heresy for a BIS employee to directly address the DISTRIBUTION of aggregate gains, they aren’t likely to. (btw, I don’t think Pritchard is correct in seeing their analysis as implying the lack of a real demand problem. I think that’s a misreading.)

  3. abynormal

    Zen Warrior Antidote…timing spot on

    “Commander, I always used to consider that you had a definite anti-authoritarian streak in you.”
    “It seems that you have managed to retain this even though you are authority.”
    “That’s practically zen.”
    Pratchett, Feet of Clay

    1. MyLessThanPrimeBeef

      There is an ancient Chinese bronze piece, from Yunnan, of two people dancing with hands out just like that.

      Some claim those bronzing making people came from Central Asia or beyond, and further migrated down the Red River to Vietnam, in an area around Hanoi (the Hong Shan culture) who made many magnificent bronze drums.

  4. abynormal

    re: World Bank ‘Perfect Storm’…“Jim Yong Kim, the Bank’s president, said: “More than 40% of the world’s poor live in the developing countries where growth slowed in 2015. Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies.”

    ‘evil’ has to be the most foolishly all encompassing word eva…
    so i thunked

  5. Matthew Cunningham-Cook

    Crazy stuff from yesterday’s NYT.

    “It stated that banks could choose to value some of their liabilities, the money they owe, according to fair value. And in doing so, the accounting rule allowed a bizarre treatment when a bank was under stress. If a bank is ailing, investors have less desire to lend to the bank. As a result, the value of the bonds that the bank has issued might fall. The rule then assumed that the bank could, in theory, buy back those distressed bonds at a discount. By doing this trade, a bank would create profits for itself. The bond’s covenant might require the bank to pay back 100 cents on the dollar to its holders when it matured. But if the bank itself bought the entire bond for 70 cents on the dollar, it would avoid having to pay the bond back at 100 cents — and the 30 cents it would not now have to pay back would become a gain in its earnings statement.”

    1. craazyboy

      “and the 30 cents it would not now have to pay back would become a gain in its earnings statement.”

      New Yawkers shouldn’t be allowed to handle money. The bank would have to “call” it’s bond early and pay it off, in full at 100%, before the 30 cents can be recognized as earnings. Generally, ailing banks don’t have cash to pay off their long term corporate debt. It would be like doing a bank run on themselves.

  6. ambrit

    Soft lines retailers look to be in bad shape this Spring. I use a quasi-mystical gauge, the weekly newspaper advertising insert index. If this is any indicator worthy of credence, places such as Kohls, J C Penneys, Stein Mart, even Academy and the ‘Sporting Goods’ stores are feeling a bit desperate. (Sorry, but we’re too marginal to support a Macys or a Nordstroms. H—, we don’t have a Costco or Whole Foods!)

    1. Paul Tioxon

      I can see living without Whole Foods, but for the love of god, It’s the 21st Century!! NO Costco, what are you out there, savages? I pledge to sign any petition or gogo internet crowd source to bring civilization to your community. I mean, you do have indoor plumbing and electricity, why not Costco, if not now, when? If not you, who else is next in deprivation? This shall not stand!

      1. ambrit

        Thank you for your expression of solidarity Comrade T.
        Your assumptions concerning “basic” services are somewhat Utopian however. Three months ago I stood behind a lady in the Water and Sewer office payment line who was having her water cut off because of a twenty dollar arrears in her bill. She was trying to pay up a previous shortage and came up shorter. Amongst the crowd she made up the difference in a direct action sort of crowdsourcing. (Yes, I chipped in. Some of us helped.) What got my attention was the comment from the lady behind the counter to one of the people in the back office; “Yep. Another one.” I would bet real money on someone from, say, Detroit having even more hair raising stories in this line to tell.
        I personally remember having to go a few months without electricity service after Katrina. That’s when you learn the true meaning of, “I’ve always depended on the kindness of strangers.”
        Yes, we are a peculiar sort of Yeehawdii out here. If it wasn’t for those d—-d hurricanes, we’d move back down to the Republic of West Florida in a HFT second.
        The Costco is surreptitiously being blocked from these regions because the company supposedly treats their employees as more than just the hired help! What is next our benign masters tell us, free and fair elections?
        Please do understand that as for the calendar, it is the 2nd Century ATE (After THAT Event) here.

        1. Synoia

          As a foreigner I have to translate “it is the 2nd Century ATE (After THAT Event)”

          I infer ATE was “The War of Yankee Aggression.”

          I am reliably informed that was just short of Armageddon. However the reaction has been the assimilation of the Republican Party, who are spreading values to combat the perfidious influence of the Yankees.

        2. JTMcPhee

          They get hurricanes in Noo Yawk and Joisey too… And tornadoes pretty much everywhere these days, and Seattleland and SoCal are just blithely going on in the time space before The Big One…

      2. Mark Alexander

        I guess we’re next in deprivation, here in the center of Bernie’s home state. We don’t have any of the aforementioned money sinks nearby. The nearest Penney’s is one hour away, Costco is 75 minutes away, and Whole Foods is two hours away. An exciting shopping spree these days usually involves buying something like joist hangers or 2x4s at the hardware store, or 50 pound bags of wheat berries at the co-op.

        We do have indoor plumbing, but don’t always use it. If I’m outside working on the pole barn, it’s too much trouble to trudge all the way back to the house if nature calls. Also, urine makes an excellent fertilizer, especially for beets and lettuce.

        1. ambrit

          Reply attempt #2.
          Howdy you all from the (American) Deep South!
          Just a question; have you all ever toyed with the idea of seceding and joining up with the Maritime Provinces? That would be a real New England. I’ll bet even the Mi”kmaqs would go for it.
          Stay warm!

          1. Paul Tioxon

            Really chilling news from Philly’s Main Line. Macy’s department store is closing in the Suburban Shopping Center in Ardmore, PA. The local news reported this devastating bombshell, saying 75 employees could be relocated to other regional stores, probably King of Prussia Mega-Mall complex. To give you an idea of just how plush this area is, it has its own Apple Store and is just down the road from Bryn Mawr College. This could herald the apocalypse as closing a Macy’s in the Main Line is mentioned as one of the 7 seals in the Book of Revelation, either that or it’s a sign to go out and buy a lottery ticket for the $600mil jackpot, either way this synchronicity is just too hard to ignore!

            1. Ed S.


              Small world. I was a “latchkey” kid in that area many years ago and remember wandering through the store as a 10 year old every Friday afternoon (ALONE!!! Call CPS!!!) when it was still Strawbridge and Clothier. At 10 the store seemed HUGE — I was in it a few years ago and it’s TINY compared to stores today. An original “department store”.

              And a more general side note: I think that Suburban Square was one of the first, if not THE first shopping “center”. Built in the 1930’s during the GD. So given that there’s been a department store there since, oh 1934 — it probably does seem like the end of days.

        2. fresno dan

          I never pee in the toilet – that is too much water wasted for dry CA…
          I have 5 acres, which is a lot of ground to fertilize….and I see no reason to waste the lifespan of my pants zippers, so I walk around without pants which makes the fertilizing operation much quicker.
          Thing of it is, I am getting forgetful in my old age…

        3. ewmayer

          I dispute your characterization of Costco as a “money sink” of the Whole Foods ilk. Sure it’s easy to spend a lot of money there but one at least tends to get good or downright excellent value for one’s moolah. Examples: bought a bottle of high-end Islay single-malt (Lagavulin; only complaint is that they don’t carry my other favorite Islay distiller, Ardbeg) for $55 as xmas gift for the bro-in-law, also a bottle of high-end (Rothschild, no less) champagne as a special New Year’s treat, just $45. In between those 2 holidays had opportunity to price both items at the local Bevmo, where the total cost would hae been a smidge over $200.
          Costco’s family-sized food items and house brand Kirkland signature ales are also great values. And they treat their employees well, to boot! Their only persistent lacuna IMO is the crappy produce, but I prefer the local farmer’s market for that anyway, where I can haggle a bit and give my $ directly to the growers.

      3. curlydan

        So true on Costco! Once you get used to buying a 38oz tub of hummus for $4.99, you’ll never be the same. I pity the poor schmucks in Kansas who can’t buy any good alcohol in their Costcos.

    2. abynormal

      China’s ‘bitcoin’ is soaring. will Walmart sell Lotto Tickets in bitcoins?
      mkts gone need some new propaganda…ex. uno: KB Home KBH, -3.68% said Thursday it had net income of $44 million, or 43 cents a share, in the fourth quarter, down from $852.8 million, or $8.36 a share, in the year-earlier period, which was boosted by a tax gain. Revenue rose 24% to $985.8 million. The FactSet consensus was for EPS of 50 cents and revenue of $1.068 billion. “While inclement weather and trade shortages in certain markets tempered our fourth-quarter deliveries and revenues, we have a positive rhythm in our business and substantial momentum as we enter 2016,” Chief Executive Jeffrey Mezger said in a statement. The company had a backlog of $1.28 billion at the end of the quarter, up 40% from the year earlier. The number of homes in backlog rose 36% to 3,966. Shares were not yet active in premarket trade, but are down 28% in the last 12 months, while the S&P 500 is down 1.8%.

    3. marym

      “Capping a disappointing holiday season, Macy’s (M) will eliminate more than 4,500 positions as part of a restructuring plan to turn around the department store’s slumping sales, the company said Wednesday….

      …Macy’s is also in the midst of closing 36 stores, first announced last year, which will affect another roughly 2,600 employees. The stores will turn out the lights by spring.”

    4. cwaltz

      Don’t feel bad. When Trader Joe’s was looking to expand it came to Blacksburg. It did an analysis and determined we don’t have the income in the area to support opening a store here. They apparently examine how many families earn above $60,000 and the area didn’t make the cut.

      The closest city(45 minutes away) does have a Macy’s though, and a Sam’s Club(no Costco either.)

  7. Robert Callaghan

    China’s Lehman Moment Far Worse Than 2008
    50% of all the debt in the world is owned by China.

    China’s massive debt growth since 2008 created the biggest and fastest growing debt bubble in all history. All bubbles pop, even the biggest one in history. The bigger the bubble, the bigger the pop, and the sooner it pops too. To stop people from leaving with their ill-gained profits, China lowered its currency. This is the pin prick that will cause the largest debt crisis explosion the world has ever seen.

    What’s Up China?

    China’s average temp rose 1.5°C in 100 years @ 2X earth’s average.

    50% of China’s rivers have dried up and GONE since 1990.

    75% of their remaining lakes and rivers are poisoned beyond repair.

    60% of their groundwater is too poisoned to touch – literally.

    50% of their farm land is too poisoned to grow food – which doesn’t stop them.

    100% of their urban air is too poisonous to breathe, even on clear days.

    50% of Asia’s rice croplands are threatened with heat, flood and storm destruction.

    50% of humans depend on rice to live.

    China has poisoned its air, soil and water for money and now that everything is beyond repair, the rich want to leave their country and move out. For the rest of us, there is nothing we can do financially because all our monetary bazookas are spent and have shot their loads since way back in 2008. Shooting money at the problem will not work this time. This will not end well.

    It’s not rocket science or mysticism. It’s simple common sense. I cut grass in a trailer parks for a living. I am not an economist. It was economists who didn’t see the crash in 2008. It was pension fund investors who had no clue then, just like now. Pension investors can hide, but they just can’t run. Nobody, I repeat, NOBODY really knows what’s going on. Being smart and knowing what’s going on are really 2 different things. Hopefully we can paper this over at least until the end of this election year, just like we almost did in 08.

    1. MyLessThanPrimeBeef

      They papered over before the Chinese election.

      We will paper over before our Nov. election.

      It seems, every year, some one is papering over. Of course, ours is most exceptional.

  8. Antifa

    The working class worldwide is carrying record private debt because for decades now, no matter how much their productivity improves the resulting profits are collectively stolen by the corporations they work for, funneled to the 1%, and parked wherever money is safest from taxes. Because workers are up the eyeballs in debt, they cannot provide the aggregate demand that would drive a booming economy. This malaise won’t change until there is a Debt Jubilee, or wages are again allowed to go to the people who produce the profits, not to the rentiers.

    There. Now “excessive private debt” is not just a thing that happened one day. Now we said what happened — we wuz robbed. The $46 Trillion squirreled away by a few thousand families worldwide belongs to we, the people. Not to a few thousand pirates.

    Banks originate loans, originate money. Yes. But why is it banks that do this? They got the gig from the Treasury back in 1913, and that idiocy can be undone. The kinds of infrastructure repairs and structural revamping of our fossil fuel world needed can only come from organized government spending, directed toward these ends, not toward increasing the feathers in the nests of the 1%. Let sovereign governments originate money purposed toward rebuilding an energy-efficient world. Let the big banks hold the bag this time.

    Banks are not in charge of anything but enriching the already rich, and to hell with the planet. What right do they have to be part of the solution? They are the problem. They are most definitely the problem.

    1. TedWa

      Totally agree. How come Stigletz gets it so wrong when it’s common knowledge that banks create money by originating loans? Perplexing. “They are the problem. They are most definitely the problem.” And they’re morally incapable of fixing any problems they created, et al Geithner, Bernanke, Paulson and every Wall St revolving door appointment by Obama and Bush.

      1. craazyboy

        The banking system, as a whole, creates what is sometimes called “bank money”. Fractional banking makes it so. Individual banks aren’t allowed to print it however. They either get it from depositors, or borrow it another bank (who got it from their depositors), sell bonds, CD, whatever. When making a loan, they really, really do have to send real money to the borrower’s bank. They get a loan commitment document in return, which squares up the balance sheet. They also send 8% or whatever to the Fed to meet the reserve requirement on deposits.

        So banks originate loans. They underwrite the loan, which makes them intermediaries of depositors/investors money. This is called maturity transformation or borrowing short to lend long, etc…

        1. Synoia

          Bank Money = Money.

          Every loan has a corresponding credit entry on the ledger. Making a loan increases (creates) a deposit by the same amount.

          You, and the banks, make it appear complex, which it is not.

            1. MyLessThanPrimeBeef

              The loans you get from the friendly local mobsters are not ‘loaned’ into existence.

              1. JTMcPhee

                Where do the “notional dollars” that tote up the “value” of all those derivatives and debt bundles come from? Does “leverage” create money? The shits who play in that room in the casino just by being associated with all that “wealth” seem to have Hopeful Mopes lining up to give them, or their corporate alter egos anyway, megayachts and Maseratis and Modiglianis and stuff in exchange for Funny Munny transfers. Whereas my mortgage and (dammit, old one finally died) car payment can only be paid with Real Munny…

            2. perpetualWAR

              A foreclosure defense attorney got the banks to ADMIT that they loaned NO money to her client.

          1. craazyboy

            Must be all those little bank accountants keeping track of the velocity of transactions for the FDIC auditors.

            Loans create depositors. That’s a good one.

            1. Foy

              It’s actually the best one. Loans create deposits. It’s as simple as that. Bank A makes a loan for a house purchase which creates a deposit that gets sent to the bank of the seller of house to complete the sale by the loan borrower. If both seller and the new mortgagee bank with the same bank, happy days for the bank. They have created a new ‘money’ out of thin air on which they earn 5%+. It all balances.

              If the seller banks with another Bank B and if there isnt another loan going in the opposite direction then at business close Bank A is short. But Bank B has excess reserves by the amount of the loan earning zero which is bummer for them. They happily loan the balance that Bank A is short back to Bank A at the overnight rate. Everyone’s a winner! Ok maybe not the borrowers and depositors, they get shafted.

              Cannot get simpler than that! But the truth hurts when veil is lifted hence the continual obsfuscation by the powers that be…

              1. craazyboy

                Yes, that’s how fractional reserve banking and interbank lending works.

                I do take offense when they take my deposits for granted which are at least a part of the cash that makes the system work for the banks. 7-8% goes to meeting reserve requirements and the rest went somewhere making money for the banks. I’m still pretty sure my entire account is a liability on their books, tho I do get worried about it sometimes when I read blog comments.

                The term “Loans create deposits” doesn’t do much to lift that veil, when you mean “deposits” are only banks shuffling accounting entries between each other. Like savers are just some external nuisance and the banks are doing us a favor. The conventional “money multiplier” explanation in econ books works fine to explain how the system creates bank money.

                Comment prophylactic: Someone will no doubt point out Canada is zero reserve banking. True, but how much of a masochist saver do want to be? Invest in Canadian junior gold stocks to keep up with inflation? Can’t depend on Social Security being all there!(ask Pete Peterson) It’s the 401K Generation – we don’t do pensions anymore. The government – we’re here to help!

                1. craazyboy

                  I’d better add that maybe the Canadian central bank doesn’t want to provide all the liquidity for the Canadian banking system, and maybe has a soft spot in their hearts for Canadian savers too. We can only hope.

                  But also I didn’t want to overemphasis the value of my 8% reserves to the US system – they may like all my money. :)

                2. Foy

                  But I think that the term “shuffling” is misleading and part of the veil as it implies banks are merely shuffle existing funds between themselves, ie they get deposits from borrowers and lend them out. But that’s not right. They create then shuffle. Every time they make a loan they make new money, I’d say most of the public don’t understand that. That’s the reason right there for booms and busts. Too many new loans and therefore new money at the wrong time.

                  Australia also has zero reserve requirement for its banks. They can create as many loans as they want provided they are within capital requirements. And many assets have extremely low or zero capital requirements. Happy days for them. A property correction in Australia is going to be real interesting for them…

        1. fresno dan

          You know, its funny (no its not) how he just went down the memory hole.
          Whatever happened to him?
          It seems to me he was obviously guilty of breaking laws, but like police where there is videotape evidence that they lied about an event, there is months of rigmarole and than ….nothing.

  9. diptherio

    Worse, as Eileen Appelbaum and Rosemary Batt discussed at length in their landmark book, Private Equity at Work,

    What did they discuss?!? Such a tease, Yves :-)

  10. allan

    “Tell DNC Chair Wasserman Schultz: Resign immediately. ”

    1. My first thought was, no, we’re well into the `heighten the contradictions’ phase.
    Keep at it, DWS, you’re doing a great job.

    2. Then I thought, it would be helpful for a corrupt yet incompetent apparatchik like DWS to be humiliated in public – it might get the attention of some of her fellow members of the Dem misleadership class.

    3. But then, when I went to sign the petition, it turns out there is no opt-out from
    “You’ll receive periodic updates on offers and activism opportunities.”
    No, CREDO, just no.

      1. Vatch

        The Roots Action petition automatically signs people up for emailings. Their notice points out that at the bottom of all of those emailings there is a link that a person can use to unsubscribe. The Credo emailings have the same type of unsubscribe link at the bottom.

    1. JCC

      I’ve signed a petition or two at Credo, but then just make sure that they are on my “SPAM List”… way too many emails from them.

    2. polecat

      Sign another petition……’sigh’……….. Really, to what end. The DNC & DCC will just stick the shiv in deeper! Two steps forward, sixty steps back!……DWS will just float to some cush private gig, to continue to privatize the gains and socialize the loses. Yes……Pigs really DO fly!!!

        1. Vatch

          Remember, Dinsdale Piranha was violent, but people were more afraid of Doug, because

          “He used… sarcasm. He knew all the tricks, dramatic irony, metaphor, pathos, puns, parody, litotes and… satire. He was vicious.”

          On a less silly note, the Dao De Jing teaches that water is more powerful than stone, because endlessly dripping water will erode the stone, not matter how hard the stone is. We need to be like water against the stone of the oligarchs and their hench people.

  11. dcb

    the stiglitz article, the keen article, the bis article all are related to the false inflation targeting stuff.

    it’s part of the blinders

    why interest rates from central banks keep going lower, etc

    it all fits in.

    periodic deflation should help to limit the credit creation causing the problems. Not all inflation is the same, just targeting inflation doesn’t lead someone to look at the proper metrics. Note as well deflation produces . a rise in real wages

    it would also make the financial engineering (borrow for stock buy backs ) less attractive

    if you can count on constant inflation overall profits have to rise (etc)

    it’s the focus on inflation that lead to all these blind spots (in my opinion)

    it’s about a rescue of that misallocated debt in an already over leveraged system

    (sorry I’m not an economist, so may not explain properly). but it’s kind of where the inflation targeting focus got us. all of these things are negative externalities of that policy focus

    1. craazyboy

      I think they should come out with a comic book for inflation targeting monetarists entitled “The Wonderful Peso”. It would have pictures of all the happy, affluent, middle and upper middle class Peso workers that reside around the world in those fortunate Peso countries. Maybe for contrast highlight a few of the lower middle class outliers that are still left in these societies acting lazy and unproductive, turning down job offers, and thinking bad thoughts like wishing for deflating food and beer prices.

      1. Jim Haygood

        You could write a non-fiction comic book titled The Wonderful Bolivar. But nobody would believe you:

        Monetary chaos began in 2003 when the late President Hugo Chavez imposed currency controls to stem capital flight after an oil strike. At the time, one US dollar could fetch 1.6 Venezuelan bolivars.

        Today, barely ten years later, that same dollar can buy 172 bolivars, a devaluation of over 99 percent! Of course, that is in the official (i.e., government regulated) market. On the black market, the exchange rate is currently nearly 900 bolivars to the US dollar.

        But gas costs only 6 cents a gallon. So it’s a Workers Paradise (if you’ve got a job, and somebody to wait in line for you at the stores).

        1. craazyboy

          Mexico isn’t a Workers Paradise yet, but in 2 years the peso went from 10p/$ to 18p/$. So Workers Paradise is just around the corner!

        2. MyLessThanPrimeBeef

          By contrast, self-service fast food is affordable here, though, to get someone to wait on you in a restaurant will set the worker back quite a bit.

          And gas is close to $3.00 where I live (some say it’s under $2 in some places). So, that’s a bummer for any capable CO2 contributor.

          And the strong Dollar has tempted many a tainted food merchants to ship their excess supply here or just not so quality products.

          And good jobs are not easy to find in the Land of Manifest Destiny.

          Which Workers Paradise is preferrable?

    2. IDG

      Who are the majority of asset holders? Who are the majority of liability holders?

      Periodic deflation was tried a lot during the XIX century and the early XX century: it produced economic chaos and depressions, poverty, civil wars and eventually two world wars. It just doesn’t work, because in the real world the first to hurt from deflation are the majority (liability holders): deflation produces decreasing economic activity which produces real wage deflation and increasing unemployment while liabilities increase their relative worth. Good grief! In our current world the outcomes would be really, really awful, as there are no places to conquer or to migrate anymore, and the population is several times larger than back then.

      Whatever the solution is, is not inducing massive deflation and pain. The solution is actually “easier” than that (well, in practice may be impracticable, but theoretically): regaining control of democracy, redistribution of productivity growth over the last decades, recycling of wealth at all universal levels and actually start working on REAL problems which we have a lot of instead of made up bullshit problems through monetary scarcity.

      1. Nobody (the outcast)

        “actually start working on REAL problems which we have a lot of instead of made up bullshit problems through monetary scarcity.”

        Wouldn’t that be nice? Politics is a product of scarcity and politicians promise supporting them will get you a bigger slice of the pie (“a chicken in every pot and a car in every garage” being a classic example). What better way to gain political control than to create artificial scarcity and hoodwink the ignorant into thinking it is real? Plus, it provides an excuse to ignore real problems because there is no money to deal with them. Infuriating. If politics actually worked, it would put an end to politics.

  12. diptherio

    Stanford economist says “bad inequality” is on the rise:

    It is sometimes assumed that the only way to respond to rising income inequality is to increase tax rates for the well off. This response is founded on the misunderstanding that inequality is increasing mainly because of reduced levies on capital gains, the Bush tax cuts and related changes in U.S. tax policy. If that assumption were correct, then it would make sense to limit ourselves to reversing those policies. But the takeoff in inequality cannot be explained by tax policy alone. There has, to the contrary, been a dramatic rise in pre-tax income inequality.

    This increase in market inequality was, of course, exacerbated by changes in after-market taxation. However, because the takeoff in inequality is mainly generated within the market, we should look to market institutions to understand its main causes and – arguably – to pursue corrective policies. As important as tax-based redistribution is, we therefore need to supplement it with policies that address the rise in market inequality.

    The institutional critique of inequality is not about the tax system, but about the ways in which U.S. labor and capital markets generate extreme pre-tax inequality. The core idea here is that inequality-generating institutions have come to be codified in law and practice and then represented – through an ingenious sleight of hand – as laissez-faire capitalism.

    1. MyLessThanPrimeBeef

      Another way is, if market inequality can’t be lessened fast enough, to sharpening the tax policy.

      If that assumption were correct, then it would make sense to limit ourselves to reversing those policies. But the takeoff in inequality cannot be explained by tax policy alone

      And so, we don’t just reverse them.

      We reverse and, to address the worsening market inequality, improve on them.

    2. fresno dan

      January 7, 2016 at 9:37 am

      Thanks for that. I wish I could remember the article, but years ago I read something about the change in anti trust policy. (and it wasn’t just anti-trust – it is EVERYTHING – trade, copyright, liability law – EVERY SINGLE thing manipulated to advantage monied interests – and of course tax rates and what gets taxed) It seems to me to have done nothing but increase inequality, decrease competition for wage earners, and concentrate political power – which they always use to get more money. Somebody yesterday in the links posted another article about how silicon valley manipulated the labor market – and as well documented, paid no real penalty for it.

      The hypocrisy about the free market, while these guys in every nefarious and devious way possible, try and undermine, limit, and eliminate completion is the thing that just makes me the most enraged. Its like someone going on and on and on about the virtues of combat, bravery, honor, courage, and than ALWAYS has an excuse that they were on an extremely dangerous super secret mission while in fact they were in a high priced bordello sipping cognac and other ….things…

      1. fresno dan

        What top researchers discovered when they re-ran the numbers on income inequality Washington Post. Important. Real wages for the bottom 90% may not have been stagnant since 1970…just close to stagnant.

        Woo HOO!!!!!! What will you do with your 0.7% increase?
        I think I’ll use mine to supplement my dirt and grass diet and buy actual food …maybe….every other week.

  13. JCC

    Meanwhile, on the TPP Front;

    Our legal scholar President just made a speech saying that the TPP has nothing to do with NAFTA and actually improves on NAFTA. What a putz. As we’ve seen so far, it actually improves on the Investor-State resolution system and makes it easier for Corporations to steal citizens’ dollars should their govt decide, for instance, to arbitrarily and unjustifiably not run an oil pipeline through the middle of it’s largest aquifer… for “expected future profits”

    “The firm says it will be looking to recover $15 billion US in costs and damages as a result of what it says is a breach of obligations under Chapter 11 of NAFTA.

    “TransCanada asserts the U.S. administration’s decision to deny a presidential permit for the Keystone XL pipeline was arbitrary and unjustified,” the company said.

    I know I’m ranting here a little, but… to state that Obama is a liar and thief would be a gross understatement. But I bet he’ll get a great job as an advisor to one of the Big Banks as well as plenty of moolah for speeches to these same banks after his run as Thief In Chief.

    1. Vatch

      Thanks for the link. The U.S. has already lost an ISDS case in the WTO on the subject of Country of Origin Labeling for meat. The Keystone pipeline could be the next ISDS loss for the U.S.

    2. fresno dan

      Long story short:
      President Obama: We have rectified the flaws in NAFTA with the TPP to make the rich richer and the poor poorer – MISSION ACCOMPLISHED…

      1. RWood

        Yeah, so if he delivers on the $15B — well, he did try…
        Ah, well, that won’t happen for a few years…

    3. Oregoncharles

      Again: so what’s $15 billion to a monetary sovereign? Just run the presses an extra day. And when the money lands in Canada, it’ll run up their inflation.

      MMT points to a serious problem with ISDS – except that it gives a big advantage to monetary sovereigns. I wonder if the EU realizes that?

  14. tegnost

    I went to sleep after posing this question
    January 7, 2016 at 1:54 am
    copper seems to be defended at 2.06, if it hits 1.99 should I be as worried as I think I should be?
    Then I woke up and copper is $1.99
    Also, what would happen if china dropped the peg to the dollar?

    1. ambrit

      I’d wait to see where copper settles this evening. A lot of punters are probably wondering about now why they installed that shiny new HFT algo last year.
      I’m a traditionalist. Try for ‘inside information’ whenever possible.

    2. abynormal

      Copper demand could see 2m-3m mt/yr “demand destruction” led by substitution of the metal by using aluminum and other materials.

      Expects substitution in autos, air conditioning, power distribution cabling rising over next several yrs (long sour mash teehehehe)

      1. craazyboy

        What’s this? Crapification Theory? Copper got too cheap, so we’ll substitute cheaper aluminum which only works 2/3rds as well? Sounds like the consumer is never gonna get a break!

    3. MyLessThanPrimeBeef

      I think the stock market finishes up today.

      Can’t let the market freely fall like this; otherwise it would be a ‘free’ market.

  15. tegnost

    Re yellow cab bankruptcy…
    Looks like your uber fares are going up, consumer….
    Re 15/hr
    let’s get in front of that riot and call it a parade,
    also was unaware that it was clinton 1 who dropped taxes on investment income.

  16. Carolinian


    So the US government strategy has now metastasized into trying to destroy the Russian economy before the oil price inevitably recovers. That would give the US government a window of opportunity spanning only the next six months.

    How this could have been pulled off so far is a testament, once again, to the irresistible force of Wall Street manipulators using cash settlement; they are able to create a crash where there is hardly any surplus oil at all. Yet even as the Empire of Chaos frantically manipulates the oil price down, it may not go down fast enough to destroy the Russian economy.

    Even Reuters was forced to admit briefly the oil surplus was less than two million barrels a day, and may even be alarmingly less than a million barrels a day before returning to the usual oil-at-an-all-time-low story. This information on the real oil surplus so far had been completely censored. It confronts head on the hegemonic US narrative of surpluses lasting forever and the imminent collapse of the Russian economy.

    There’s always the suspicion that Escobar is saying more than he actually knows, but if the US really is manipulating the world economy just to take down Russia then our neocon Masters of the Universe are even more dangerous than previously thought. The Greeks had a word for it: hubris.

    1. NotTimothyGeithner

      The Russian Federation is the lynch pin to a multi-polar world. The Russian Federation isn’t large enough to conquer through sheer size, it’s small enough to throw out, and Russia can endure a spat with China. The U.S. and China are too large for equal relations between smaller countries to exist. Leaving the U.S. sphere for the Chinese sphere makes no sense because one would just be trading masters and incurring transaction costs. Without Russia, there isn’t a potential partner who can soften China.

      Even if country x makes a deal with China, they can go to Moscow for aid if there is a relationship problem. Can Berlin, Ottawa, Tokyo, London, Paris etc provide a balance for a country caught in the U.S.’s cross hairs?

    2. James Levy

      I’d guess there are wheels within wheels here. It is not a story of one hegemonic logic driving the bus. A whole group of players are trying to drive oil prices both up and down. At least one powerful group is telling the banks to keep lending money to the frackers, who have been losing money hand over fist and would be bankrupt if they didn’t have elite backing out the wazoo. Their actions, along with the Saudis pumping for all they are worth, is driving down prices. But I’d bet the big oil conglomerates, the Russians, and the Venezuelans are pushing hard the other way. We’re talking huge money here, and in the neoliberal world order money tends to trump what we used to think of as national or strategic interests. We can only see the results–we are not being let in on the machinations.

  17. Vatch

    That meerkat in the Antidote seems to be directing traffic. Or maybe it’s pretending to be Babe Ruth, and is pointing to the place in the outfield where it will hit a home run.

      1. MyLessThanPrimeBeef

        Upon careful examination, it looks to be a non-sengi traffic cop, directing sengi traffic, in the savanna.

  18. Matthew Saroff

    Some notes on the DPKR nuke test:
    * It is harder to make a small bomb than a big one, so while a 10KT thermonuclear first weapon test is possible, it is highly unlikely.
    * What they were probably working on was a boosted fission weapon, which produces a small amount of fusion, typically 1½% of energy released. (The small amount of fusion releases a storm of neutrons that increase the “burn rate” of the fissile material.
    * At 10 KT, if they were trying to make a boosted fission weapon, the test was probably a failure.
    * Working on a boosted fission weapon is significant, because they lend themselves miniaturized weapons that (for example) can be placed on top of a missile or in artillery rounds.

    Finally, and most important, even if this is a failure, it’s a big deal, because, in addition to being a nuke test, people learn from tests, and become more competent.

  19. petal

    There are days I’m ashamed to say I live in NH. This is one of them. The local gun shop in Claremont gave Trump an AR-15.
    1000 listened to him at the high school. Today he is in Burlington, VT. Will post when I see a report. Cheers.

    1. Vatch

      Did they do a background check on Trump before they gave him the gun? He seems a trifle unstable to me.

      1. Will

        Oh come on. He’s white and he has pots of money! If people like that can’t be trusted with guns, then who can?

      2. Jess

        According to a story about two years (or so) back, Trump (along with Roger Ailes) are among the anointed few lucky (or influential) enough to have New York Concealed Carry Permits.

        1. MyLessThanPrimeBeef

          A more successful way is (or was) to kill their buffalo, rob them of their food.

          And in that sense, many non-violent tools are less alerting to the victims.

      1. craazyman

        He’s an actor getting to the end of the play and the curtain is still up.

        We’ll see what comes next! I wonder if he even knows.

    1. EmilianoZ

      Sehr interesting map. There was a link yesterday to an article in the Atlantic about the Shiites in Saudi Arabia. It was said that the regions where the Shiites live are among the poorest in SA. There was no mention of oil. So, the Shiites live in oil-rich regions in SA, and yet are dirt poor. Sounds like a colony.

  20. allan

    Liberal Seattle congressman Jim McDermott just announced that he won’t be running for re-election, opening up his seat for the first time in almost three decades. So what does the editorial board of the Seattle Times want?

    In choosing a successor, voters should look to the east and south — to U.S. Reps. Suzan DelBene, D-Medina, and Derek Kilmer, D-Gig Harbor — for models of what tech-savvy, collaborative representatives can accomplish. It’s not enough to be a liberal lion in a liberal district.

    Needless to say, `tech-savvy, collaborative’ is editorial-ese for `New Democrat Coalition TPP supporter’.

    1. polecat

      Kilmer’s my dist. rep………I cannot look at his mug without thinking of ‘Where’s Waldo’….”looks great…..less filling….. Just another Status Quo treasonous trade traitor…..with a smile.

  21. Poopypants


    Why do you insist on posting garbage from ‘Business Insider’?

    The concept that life exists merely to take energy from a higher quality to a lower quality is so logical that if a person is to give it any amount of thought it is one of the very rational answers.

    Here’s the simple route to this logical conclusion:

    How is it possible that complex structures (humans as one example) exist when entropy seems to be all around us and never seems to stop or rest? The only logical answer is that complex structures are created with the addition of tremendous amounts of energy. A human being, for example, requires incredible amounts of energy in it’s developmental stages but later reverts to an energy wasting machine. Is a solar system, or star or galaxy any different? So why would the universe waste so much energy creating living beings or stars? Because it has no choice. Does nature decide to form a Tornado or Hurricane? No it’s simply dealing with large differences in environmental factors as fast as it can. The outcome is what it is. Same with life or planets or whatever. Nature abhors a gradient, meaning unequal distributions of energy.

    That being said, once the benefits of adding more energy no longer produce growth or beneficial complexity (sounds kind of like our ‘Capitalist’ system, eh?) entropy takes over and the rest is history, or future I guess.

    If a person can get past religious dogma and ask the pertinent questions, the answers reveal themselves. One doesn’t even need a neat blackboard with cool math equations or a hip beard to come to the above conclusion.

    Also, why is ‘Business Insider’ writing articles on Physics? To get clicks, that’s why. It’s a second rate internet rag looking to be bought up ala ‘Huffpost’.

      1. hunkerdown

        In a coordination game, as every society is to some degree, it’s important to know what other people are thinking and seeing, even if it’s pure crack-addled fantasism. Linkage ≠ endorsement.

    1. MyLessThanPrimeBeef

      So why would the universe waste so much energy creating living beings or stars? Because it has no choice.

      It has no choice.

      Immediately, a wild thought comes to mind – another universe is bullying our universe into doing that.

      If our universe has no free will, can we, the components in it, have free will?

  22. Jim Haygood

    How can Alexander & Baldwin be competitive making sugar in Hawaii, when the Jones Act compels them to use U.S. flagged shipping to the U.S. mainland (which drives up the cost of everything in Hawaii)?

    It’s the dreaded multiplier effect: saving a few U.S. shipping jobs, at the expense of many more land-based jobs in Hawaii.

    Hawaii should’ve negotiated an exemption from the Jones Act before joining the U.S. in 1959. But it’s too late now: once you check in to the U.S. roach motel, you can never leave.

    1. barrisj

      As one who was a full-time resident of Maui for many years – living in West Maui, just below the former sugar-cane growing areas – I can certainly attest to the environmental consequences of tearing up a fragile soil base for cane cultivation, then abandoning the monoculture without any sort of soil-stabilising replacement cover. The notorious Maui “red dust” comes sweeping down the mountains during windy weather and coats absolutely everything, permeates living spaces, and even gets into clothing hanging in closets! Many proposals have been put forward by “entrepreneurs” to recover the ag potential of the slopes, but most – other than more upmarket housing for Mainland haoles – proved to be economically unviable without heavy govt. subsidies. All of this is a legacy from the 19th-early 20th Century plantation economy introduced by foreign capital, including not just sugar production, but pineapple cultivation as well – which, parenthetically, has also declined on Maui to just a small specialist industry producing the rather unique “Maui Gold” variety. Much of Hawaii’s celebrated “multiculturalism” and multi-ethnicity was the direct result of importation of foreign labour from Japan and The Philippines, and a lesser contribution from China, all to work the cane and pineapple industries owned by wealthy whites, the very same whites who pushed for Statehood for so many years, and excluded native Hawaiians from a proprietary stake in their land. Most of the large ag companies had long ago diversified into real estate development, largely hotel and resort construction and management, and today exist solely for that purpose. The abuse of Hawaiian lands through rampant monoculture exploitation will take decades to repair, as remedial efforts are always tied to the profit motive, and little has surfaced to date to square environmental needs with financial incentives that don’t lead to more degradation of a fragile ecosystem.

      1. JTMcPhee

        …why can’t they do like Good Americans are supposed to do, slash and burn and then Conestoga up and Go West? …oh, wait…

  23. flora

    Swedroe: Private Equity Not Worth the Fees.

    “He cites a recent disclosure by the California Public Employees’ Retirement System (CalPERS), the nation’s largest pension system, that despite paying billions in fees, its private equity investments had earned an annualized return of 12.3% per year over the 20 years ending June 2015.

    “Compared with the return of 8.9% provided by the S&P 500 Index, that may look like the fees were well spent. While that comparison is one private equity (PE) fund that sponsors would love you to make, unfortunately it’s also incredibly misleading.”

    As Yves has been reporting for some time.

    1. fresno dan

      thanks for that

      However, we still would not be accounting for the incremental risks of illiquidity and the much higher skewness and kurtosis of PE, risks that investors should be compensated for taking in the form of higher returns. Over the 20-year period ending June 2015, the PE investments of CalPERS earned 12.3% per year. That was just 0.2 percentage points higher than the 12.1% return of the Dimensional Fund Advisors (DFA) U.S. Small Cap Value Fund (DFSVX).
      And that’s with investors in DFSVX enjoying the benefits of daily liquidity, total transparency and broad diversification (for example, the fund currently holds more than 1,100 stocks). (Full disclosure: My firm, Buckingham, recommends Dimensional funds in constructing client portfolios.)

      Thats just it – apples to apples, pears to pears….

  24. Jim Haygood

    From the NYT article on IMF overhaul:

    In December, the IMF overhaul got its ride on the year’s last must-pass bill, which funded government operations through September.

    Gone are the days of germaneness objections in parliamentary procedure, when policies had to be debated and passed on their standalone merits.

    Now committee chairs decide at 3 a.m. what’s going to be whooped through. What you or your KongressKlown may have thought about IMF policy becomes wholly irrelevant. The power elite snuck it in there, and no ordinary rank-and-filer can do a thing about it except ’embrace the suck.’

    But we kept our friends the Ukies in business, so Joe Biden’s happy.

  25. fresno dan

    my favorite quote from an article today

    Piketty, who was a promising young theorist at the Massachusetts Institute of Technology in the early 1990s, wrote in the introduction to “Capital in the 21st Century” that he decided to move back to France in part because economists are less respected there and thus must “set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.” Then he went looking for some data to crunch.
    Ah, in the US economists have reached zen perfection – they know nothing about everything…

  26. GlobalMisanthrope

    Re: Opinion: Red alert in Cologne

    Notice there is no statistical context given in the reporting or opining on these incidents. Sexual harassment and assault stats, for starters. Then more specifically, how much of this behavior usually goes on in large German crowds? Remember lasciviousness was a charge made against Jews by the Nazis and against Blacks by Whites in the Jim Crow south.

    The question is how do Germans feel about and how does the German press cover sexual harassment by Germans against “their own” women?

    This is from 2013, but provides some perspective: Wake Up Germany, You’ve Got A Serious Sexual Harassment Problem

  27. Carolinian

    Michael Moore making sense.

    Thanks to you, sir, and the premeditated actions of your administrators, you have effectively poisoned, not just some, but apparently ALL of the children in my hometown of Flint, Michigan.

    And for that, you have to go to jail.

    To poison all the children in an historic American city is no small feat. Even international terrorist organizations haven’t figured out yet how to do something on a magnitude like this.


    1. OIFVet

      I have a small quibble with Moore: neoliberalism is international terrorism. It poisons, it kills, it rapes the planet and all who inhabit it.

    1. craazyboy

      I don’t go above $700.

      That thing must have enough LiPo battery in it to light a city block on fire if it ever crashed.

      1. Carolinian

        It could be vaporware anyway. Still our Jetson’s future may include something like this.

        1. craazyboy

          Maybe on the moon. Too much gravity here. Unless you don’t mind paying $300K for something that can stay airborne for 23 minutes before needing recharging.

          Actually, I don’t doubt it flies, for a little while.

  28. Oregoncharles

    “] However, there are fears that Maui will turn into a dust bowl without the cane vegetation to anchor the dirt and the irrigation to keep the soil wet. You see this during the times between plantings ” – a strong argument for a more permanent crop, as Lambert has probably already pointed out. Macadamias? Or pasture. Or the forest that was there originally.

    1. HotFlash

      Hmm, start with something like sweet potatoes as a temporary/cover crop, the go/grow from there. Re agri-scale cover crops, more here (albeit in a temperate zone setting).

  29. Oregoncharles

    “TransCanada launches $15-billion free trade challenge over Keystone XL denial”
    So what’s $15 billion to a monetary sovereign? Just run the presses another day and ship them a few truckloads of ones.

    Isn’t the financial penalty idea based on a false understanding of money itself?

  30. Propertius

    “PTSD nation? U.S. shootings inflict growing mental toll ”

    Perhaps we need to get rid of the First Amendment, too, since all the media coverage must be contributing to this massive PTSD outbreak. We’ve already pretty much eliminated the Fourth, after all.

  31. Oregoncharles

    “Is the whole theory of secular stagnation a hoax?
    The Bank for International Settlements says the entire strategy of stimulus by global central banks is based on a false premise ”

    Clear as mud. Personally, I could use a translation of Evans-Prichard’s translation.

    And I keep wondering: how is he related to a famous 20th-Century anthropologist, some of whose books I own?

    1. Barmitt O'Bamney

      Die Mürkler’s tausend jahre reich is about to end abruptly – and no mere coincidence.

  32. Oregoncharles

    “Note To Joe Stiglitz: Banks Originate, Not Intermediate, And That’s Why Aggregate Demand Is Stuffed”

    This is beginning to resemble counting angels.

  33. Synoia

    This physicist has a groundbreaking idea about why life exists


    I postulate liquid water plays a significant ole in enabling life…

    1. craazyman

      the dude souunds like the kind of guy who could figure out Bigfoot. Hopefully he doesn’t deaden his mind by falling into a rut of non-stop hyper-rationality. He seems to have capacity for channelling. Let’s hope he uses it. Well, if he doesn’t the world won’t be the worse for it. But he has potential to think Big ideas that for sure.

  34. TedWa

    Hi Lambert and Yves: I don’t know if this has been posted yet but the public comment period for the TPP is only until the 13th. We need to get everyone to comment on this atrocity. Please post a link daily or whatever you can do. Thanks – Ted

    “It is critical that as many people as possible write to them about this. (In 2014, millions of public comments pouring into the FCC saved the Internet)

    Here’s how you do it:

    Comments are submitted at!home or

    If you have problems, you can contact Yvonne Jamison of the USTR at (202) 395-3475.

    1. JTMcPhee

      Thanks for the reminder. If there is any vitality left at all in the “rule of law,” lots of public comments do help. As the process wends, policies clobbered and poisoned by ISDS and offspring and the defalcations of “elected Rulers” may run up against some judicial rulings that the whole thing is, as we hopefully whisper about other pilferages and grand thefts of our rights, and yes, property, unConstitutional. Setting up some interesting power plays.

      I’m looking for a succinct statement of the evils in the corporate-coup document, to write into a lpublic comment to file, also to send off to the “elected Rulers” and city councils and county commissioners and editorial boards and such.

  35. polecat

    I’m sorry if I seem ever the cynic…..but our glorious reps. & regulators will give the plebs the big middle finger once again…..just look how they voted, and REVOTED for fast track, not so long ago! They simply DO NOT CARE WHAT WE THINK. How obviously more transparent can that be!!!

  36. nothing but the truth

    “Real wages for the bottom 90% may not have been stagnant since 1970…just close to stagnant.”

    sheesh. just fudge inflation numbers (which cannot be cross checked because the raw data are “secret”) and come to any conclusion. economics at is purest.

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